First Home Saver Account

The First Home Deposit Saver Account has been introduced by the federal government so as to help the first home aspirants to make their dreams come true. This is a wonderful opportunity for the first time home buyers to save a deposit using this simple, tax effective program. It is true that in today’s recession times, the housing problems are becoming even worse. The government has taken a step forward by providing contributions to this account and all interest that accrues to the same account is taxed at a very low rate.

When to go for FHSA:

If you are saving up all your money to buy a house for you to live in at Australia for the first time and if you are able to save at least $1,000 every year for four different financial years, then you can avail the FHSA program. For this you need to be aged either 18 years or above and yet not above 65. In addition you should also be able to provide your tax file number as well. Make sure that when you apply for FHSA, you have never availed of this facility before and that you do not have another property in Australia that you have purchased or built for the purpose of housing. If you are going to make this house along with savings of others, then you need to separately open up your own FHSA.

First Home Owners Grant:

The first home owners grant is a completely different scheme from the first home saver account program. The conditions that exist for each of these programs are completely different and hence you need to apply for each of them separately. Those who are eligible can qualify for as much as a $7,000 first home owner’s grant in addition to availing the FHSA program benefits.

FHSA helps first home buyer save a deposit

The government will contribute around 17% of the first $5,000 contributed annually to the account. The overall account balance cap is fixed at $75,000. This program helps you to save a deposit and the highlights of the FHSA with regard to your deposit savings are:

Ø       You can deposit as much money as you like into this account.

Ø       You can only deposit or save your after-tax money.

Ø       You are required to save at the least $1,000 per financial year and for four financial years minimum. These four financial years need not be in a row.

Ø       You can keep on saving in your FHSA account till the amount reaches the account balance cap. Once the account reaches the maximum cap amount, you can only keep on adding government contributions and interest credited to such savings.

Ø       You can choose to use this account either till you buy your first home or till you reach the age of 65.

This program is intended to help first time home buyers to succeed in their efforts. The recent consultations have helped to deliver an enhanced FHSA that makes the whole program fairer and simpler as well.